be bad information right now. but finger we go back, revenue gain, look at the fundamentals. and for those who are moving their interest rate hike time period up on the fed, the dollar strengthening, what is happening in the corporate sense as you mentioned right now, i don't know that the fed is in a hurry in a low inflationary environment. >> we'll leave it right there. as the clock strikes 5:00. with my thanks to everybody here on closing bell. "fast money" is next. "fast money" starts right now. hive from the market site in new york city's time square, karen finerman and guy adami. we start off with the market alert. stocks selling off into the close today. this is the first time in nearly fife years that the s&p 500 has closed down, at least 1% in three straight session. at one point, it did look like we might get a reverse until the small cap russell index, but it also closed in the red. tech taking a hit with the semiconductors closing lower after friday's big sell-off and

concerns over ebola causing major pain for travel stocks like the aramis. is the fear trade officially here? and steve grasso, i want to go to you first. you have been pointing out the 200-day moving average. we pierced that. now what? >> you need to close below this for a couple of days. the last time we pierced it back in november of 2012, we stayed below for about a week or so. we also, the other number that i flagged was 1888, which is the weekly moving average, 50 weekly moving average. we pierced that. closed below. this is all ebola right now, quite frankly, all ebola. >> it's not growth concerns? e had growth concerns. we had -- no, no, i will correct myself. we've had growth concerns. we had russia. we had ukraine. we had the mid east. we had everything. and today what kicked us off were more ebola headlines. when the market was trying to rally back, as you said in the intro, that's where it failed. and we started to see the ebola headline. >> i disagree with that. >> you're entitled. >> you throw that on to the heap. listen, we have a situation you

mentioned the 200 day moving average. the s&p is up 35% for from the last time it closed below in november 2012. we have an economy here that is obviously doing better than the rest of the world. but we also know that the fed has basically taken the training wheels off here, okay. so we have a market for if first time in many years that doesn't have that implicit put from the fed. >> not for a long time. >> we have known it, but it's all kind of coming on us now. if you think about the s&p 500, it has been a safe haven trade. everything that is going on here, the fears of growth overseas, we cannot really decouple after we have been in a five-year recovery here. so i think it makes sense here. >> does it make you feel better or worse about the markets that we had these heroic attempt at reversals during the day, but they failed? >> it's interesting. so friday, i'll answer your questions. friday i thought we were going to open lower and then ramp the rest of the day and have this 20-point reverse toll the

upside. it got there. it got back above 1904 and it looked like we were off to the race. six months ago that's exactly what would have happened. obviously didn't happen today. for almost the third day in a row we close on the absolute low. not very encouraging. 1863 is the level we bounced off of and through in may, in the middle of may. i think that's where we trade down. to we've been flagging 103 in the iwm. that feels like it's in place as well. and that continued strength in bond markets. at some point, i think the mark is going to wake up to the fact that lower rates are not necessarily bullish for the market. >> lower rates and lower oil, karen. >> yes. >> you can make the argument that it's great for the u.s. consumer, great for companies in terms of lower costs. what do ucould think it really tells us. are you worried or a tail end? >> i am worried, but it could be a tailwind that would be one thing good for the airlines. guy and i were talking than oil. oil there i think is a proxy for fears of economic slowdown. and so that is obviously a negative, though.

but let me just point to the volatility index which just went nuts today. >> yep. >> up huge, closing on the absolute highs. and, you know, when you see it like that, it is very scary, of course. but to me, i just find there are tons of things now that are really interesting. it's scary to step in. i haven't done it yet. i think we may open down tomorrow. and there are a few things i'm going to look to buy. when things are trading down in integers, which we saw all over the place today in so many different industries, that tells you something else beside rational thought is going on. it could go on a lot longer. >> so you the rational investor steps and thinks what? thinks i might buy which stocks? >> industrials to be absolutely annihilated. that's a place i would look. the airlines i think does have -- you could see the specific story there. so i never loved the space anyway. so that's probably one i wouldn't step into. >> in terms of the vix, new high in today's session. >> what is different this time?

i'll tell you what is different. the momentum broke. well don't have that fed put right there. the fed has told us they're data dependent here. you can talk what you're going to do. let's talk about the vix. all of the sudden if they reintroduce qein the next couple of months, what do you think that does to volatility? here is the federal reserve that has led the charge on getting back the global economy, getting back our economy from the depths of you know what, five years ago, and all of the sudden they tell us that things are better and they're getting ready to raise rates next year. but all of the sudden they got to get back in there and start buying bonds? that will not be risk assets. >> no matter what the fed does, if they do nothing, it's bad. if they do something, it's bad. >> we were in a goldilocks period where we were okay with rates at 3% and growth here. we have an economy that in q-1 had a negative 2% print because of the weather. what does that tell you about how fragile this recovery is? so if you think about where we are, as far as volatility with the vix closing at two-year highs, we just broke key momentum levels, people. i'm not telling you to go out and sold.

but we could be oversold on a near term basis. they may be great buy opportunities but it could be different this time. >> you're not saying to buy either. >> i covered a lot of shorts today. my q short and short positions. >> waiting. >> you got to be nimble. you got the trade ail bit here. and for those people who don't have protection right now, you don't go out -- >> what are you waiting for? what makes you feel as if those covering those shorts was smart idea? >> because we're oversold. we're oversold in a very short period of time. >> unless the trend has changed. unless this whole growth has really caught up with us. unless the rates are going to be an issue, or unless the world is dramatically slowing and the trend as changed and now we could be 100 handles lower. >> all right. hold on. in terms of looking at your screen today, guy, was there anything attractive to you? >> the fact that face obama held up all day, facebook was trading well most of the day. i thought that was interesting. this late sell-off in google that we could probably talk about is interesting. obviously, the weakness in the airlines and kudos to dan. by the way, dan said 1900 on the s&p. obviously got there he covered a short.

that's the right thing to do because you have the trade the market that is in front of you. and has been extraordinarily bearish on is the airlines. the weakness there continues to be something that you have to address and you have to focus on. >> alibaba actually traded great, down less than 1%. >> are you a buyer? >> no, not yet. >> apple is impressive. i know we're waiting on a new ipad, mack book. you couldn't help think this was an impressive action for apple when everyone has been betting against it saying we're going to head lower, we're going to head to 200-day moving average. this is something that is very impressive. >> all right. let's focus on oil right now. brent crude hitting the lowest level since 2010 in today's session. dropped 23% from highs reached in june. let's bring in dennis gartman, editor of the gartman letter. great to have you with us. >> always great to be here, mel. >> eurodollar specifically. what do you think is driving this as the dollar is showing weakness here in the after hour session? >> first of all, i wish i knew

what was driving the dollar lower. but all of the sudden i sent out a note to everybody saying look what is happening to the dollar. the yen had moved almost 60 pips. the euro had moved 70 pips after the close of stock trading. some news has come out. i'm not sure what it is. but it is very suburbing to see the dollar move that hard, that fast, and that low in such a short period of time after the close of trading. so there must be some news out there that we haven't seen as i'm sitting here in the chair. but this is disconcerting. is a very -- when euro moves 70 pips in 15 minutes, something has happened. >> so as a trader, you're watching this move in the dollar. what are you looking to do or looking not to do as you see the move? >> well, first of all, i think it's still a bull market for the dollar in the long run. but something has happened in the last 15 minutes. what is disturbing is that there is every reason that the yen should weaken there is every reason we should be trading 110, 115, 120 into the dollar. but here we are trading at 106.50 yen to the dollar.

we were at 109 just three trading sessions ago. so something is going on here. money is not moving to the united states as we thought it should have been moving in a safe haven. there will be many on the bullish side of the stock market who say that a weak dollar is going to be beneficial to stocks. have i my doubts. this is a very disconcerting environment that we're in. and right now the only place that i feel comfortable is one, on the sidelines, and two, owning gold in non-u.s. dollar terms. otherwise, i wish to own nothing. >> you wish to own nothing. so you're moving completely to the sidelines? because we're not just seeing this dollar move in the after hour session, but also coupled with the move in crude oil and what these two things are telling us is perhaps economic growth in the united states is not as good as people had thought. and so therefore, dennis, your trade is to be in cash? >> my trade is to be in cash. the crude oil market is telling us a number of things. one, the crude oil market and the term structure of crude oil is telling us there is an absolute abundance of crude oil out there. the saudis have made that unbearably clear. the kuwaitis have joined them.

when you have the kuwaiti's oil minister talking about the fact that he would not be uncomfortable with $77 crude, crude is still going lower. i don't think that the crude oil market is indicative of economic weakness. i think the crude oil market is indicative of excessive inventories of crude. and even more coming at us and the fact that the saudis would like to push crude oil down sufficiently to stop fracking and to do damage to the iranians and to do damage to the russians. but what we really have here, and dan i think is absolutely spot on, in the stock market, you have broken every sort of support. you have taken every sort of long-term support out. and worse, you're starting to see the way the market used to function in a bear market, opening higher, closing on its lows. on the great bull run we opened every day almost and closed on the highs. now we're opening higher each day and closing on the lows. from a technical perspective, from an economic perspective, this is very disturbing. >> i'm a viewer at home, dennis, i'm getting panicked based on

what you say. should i be panicked? >> you should be less long than you have been. and i think you should be demonstrably less long than you have been. i think that's the proper place to be. when you start breaking trend lines and closing below 200-day moving averages and below when markets open higher and close on their lows. when the vix goes up as it has, when the derivatives markets are showing you that markets want to go lower, being less long, being less exposed is probably the better place to be. >> bottom line, dennis, one percentage percent of your folio isn't cash? >> 95. that's about where we were as of the end of the day. i don't want to be misquoted. somewhere north of 80% is in cash. cash and short-term bond funds. that's close enough. >> all right, dennis, thank you. dennis gartman of the gartman letter. north of 80% in cash. >> that's crazy. that's a big number there.

what's interesting is when you look at the crude, $85 a barrel is where it's break even basically. you're going see cap ex come in if crude stays below this level. and the large integrated names have been a safe haven. i think people start to dump those names as well. i'd stay long utilities. that's the new gold now because gold hasn't really rallied. >> energy stocks are down about 17% since the beginning of september. we've seen the fallout in terms of the rails that transport oil that get a lot of their car loads from shale and the railcar companies have been crushed over the past month. >> i've been trying to look for bottom names specifically like an exxonmobil and anadarko. it hasn't happened. we talk about rig huge dividend. seasonally that does not perform well at all. unfortunately, you have to wait and see on lat of the energy names. >> we have sectors that were large parts of the recovery that are entering or entering near bear market territory. here is the home builders. and this was a large part of

what the fed tried to do with introducing qe is get housing stabilized, you know. so we have the hxp. it's down 19%. a lot of sectors have been rolling. and to dennis's point, the technical damage this time around is very different. for you guys who have been trained to buy the dip, i'm saying you may not want to buy as soon. wait for some stabilization. >> well, i guess on heels, dan, for most people i think they can't be as nimble as dennis. to be 80, whatever number it was cash. you got to be able to get out at the right time. and then you got to be able to get in at the right time. a fnd you do have long-term gains, it's a terrible tax if you can be that nimble, fantastic. >> all right. gopro shares sinking today on reports a helmet mounted camera contributed to a brain injury. this a red flag for mainstream consumers and investors? and momentum is slowing down at netflix and tesla as well. we'll report whether these pullbacks will be fine, coming up on "fast."

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shares of gopro sinking today on reports of a head injury sustained by formula 1

driver michael schumacher in december may have been caused by a gopro camera attached to his helmet. the rumors began when a french journalist over the weekend said he spoke with schumacher's son who believes the gopro was the cause of the accident. monset now walking the comments back, tweeting earlier today, stop all speculation. i say i saw mike schumacher. i don't say where. i don't say i talk with him or i did an interview with him. clear? f 1. all right. we ask gopro for a statement and the company referred us to that tweet. matt, great to see you. >> hi there. thanks for having me. >> a lot of market cap was sliced off the stock today. feasibly on the back of this and also on the back of bad tape. overreaction you think in the stock? >> yeah, i think so. the stock is currently trading at a very rich valuation. so any news is going to cause waves in the stock price. >> what happens, though, if gopro is forced to put a warning label on every single camera

they sell? won't that even at the margins, you know, hamper demand? >> i don't think so at all. in fact, i think it might be more effective to put a warning labels on trees. the fact is gopro cameras for extreme sports and people who take them to extreme places. >> question, so forgetting about this story, i don't think this is a reason to sell gopro. but what your views? can gopro, forgetting about a hardware company, can may become a media company? you have been around in a long time. in your opinion? >> i think they can. i think they can officially transition from a hardware company to a media company. they're currently leveraging their youtube channel quite smartly and promoting all these different videos that the thousands and thousands of gopro fans are uploading every day. their software makes that possible. and now there are startups out there that are actually taking the gopro cameras and making their own software around them. >> all right. i got to ask you. you're a journalist. ima journalist.

does it make you scared that everybody on to the street loves this stock and sees -- or almost everybody, and sees the ultimate sort of potential panning out in terms of it being a median company and not just a commodityized hardware company? does that give you pause? >> it does slightly. however, if you look at it, gopro is turning out products are much like the iphone in that they're producing this large ecosystem of accessories that live around them. while it is trading in a very rich valuation and it is almost at its max 200% above its ipo price earlier this year, i think that they can transition quite well to a media company. >> all right, matt, thanks for your time. appreciate it. matt burns of tech crunch. we use gopro as an example here because it is one of the poster children out there for momentum that has been sucked out of this market. gopro shares from october 7th down about 21%. take a look at tesla as well. this is another example from its highs on september 4. it is down by about 23%. so what do we make of these move

here is? >> gopro clearly get another shot. i still like this story. i'm one of the people that does like the story. and we have liked it for a while. tesla 225 is where it vacillated around today. if you've been waiting for the opportunity, this is it. i think you play it from the long side here. >> i agree on tesla. i think tesla, china is going to be their big market going forward. you're look for luxury and for them to beat the air pollution. that's where you're going to be on the buy side in tesla. with gopro, i don't see it. why can't it be apple? why can't it the other hardware companies making cases for it? why can't going environmental their own youtube? there is too much competition. i've been dead wrong, but i think it's over. >> i wouldn't listen what to do with go pro here. if he has an opinion on the cameras, maybe. this thing is going to be the last of the bull market babies when this thing is all said and done. it trades seven times sales. >> what are some of the other babies in your opinion? >> let's look at some of the darlings of this last leg of the bull market here. >> sure. >> pandora and yelp. they're all break do you think.

pandora just made new lows and new eco systems. >> what about twitter? >> twitter trades on a scarcity value. i think it is such a unique social property, thing is so few like it out there, i can't tell you with their current run rate that it's a buy right here. i sold it last week at $55. and i would buy it back in the mid to low 40s. but to me, if everything is going to get nailed, then everything is going to get nailed, okay. this is the last thing -- this thing has flat lined at 40 after its ipo and went to 80. don't be buying here at 70. >> there are certain brand names that become synonymous with the product. q-tips. >> band-aids, jell-o, zero. >> and gopro is one of them. and i think that's why the gopro will survive. this christmas the huge gift is going to be -- >> kodak and polaroid. >> at some point. it ain't going to happen. >> the product surviving and it being good for the stock are two separate things. >> agreed, agreed, agreed. >> listen to the tech blog fer you want a review on the product. >> anger! >> it's no different from any

other night here. jp penny gets a new leader, but will he be able to turn things around? and are tesla's best days behind it? a deeper dive into what is behind that sell-off, straight ahead. "fast money" means trading. everybody's got to bring their best information each and every night. the entire trading day is the preparation for the show that night. >> it's idea generation. it's all about giving you a framework for how to look at the market. i am guy adami. i am "fast money." >> i am pete najarian. i am "fast money." for trading never stops.] e so if you get a trade idea about, say, organic food stocks, schwab can help. with a trading specialist just a tap away. what's on your mind, lisa? i'd like to talk about a trade idea. let's hear it. [ male announcer ] see how schwab can help light a way forward. so you can make your move, wherever you are. and start working on your next big idea. ♪

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♪ jcpenney getting a new ceo and kicking off our top trades. marvin ellison is joining jcpenney on move 1 this year as president and ceo designee. the stock did rise earlier today but it did close in the red along with a lot of the market karen, what do you make of this move? >> i didn't know of him before this actually. it's surprise this is who they chose. but i do think of home depot as really building succession and

building managers that are fantastic. so i would just assume that he is one of those. some of the issues that jcpenney has, i do think he can help with. however, even though they have fixed their balance sheet for a while, they have a lot of time, valuation here is still ridiculous. i mean, the stock is down i think 30% for the month. >> right. >> and it's still not cheap. >> which compared to macy's. >> it's not even close. the growth margin is not even close. macy's is so much better. it's not that macy's is more expensive, because it's the best in class. it is materially cheaper. i don't see how you can own jcpenney over macy's. >> anybody take a flyer on jcpenney? >> this is a company i think a lot of people would love to see come back. it's a really great american brand. but like karen just mentioned the balance sheet, it's a little impaired. it has a $2 billion market cap, $6 billion in debt. they need to recapture some of the market share they lost under johnson or it's going to be a very distressed story for a

while. >> the only reason you would take a flier out on it is the short interest is still huge many this name. >> for the bounce. >> from where it's coming from, it seems to have leveled out. we had the 5 dollars level. it's a little lower than the last sell-off. but just because there is 30% short interest as a percentage afloat, i think that's a little risk reward right there. >> all right. next up. csx moving higher on a "wall street journal" report that canadian pacific railway had approached the larger railroad last week to discuss a possible merger. csx reportedly declined the proposal and declined to comment on this report when asked by cnbc. >> and a lot of regulatory concerns as well. we'll see what happens. this could happen. i don't know. what you can't do is go out and buy csx. seven times normal volume today. if you're looking for a trade, maybe it's cp has gotten whacked over the last couple of months. the rails are a little bit in trouble here, some of the things you were talking about before. if i had to pick one in the space right now it's kansas city southern. >> you think think has the railcar shipments of shale dwindle or there is a threat of

that? the first half of the year 70% of the revenue increased year on year came from specifically car loads of shale oil. >> but i agree with you. you're right. and i think that's an absolute concern. the other side of that coin is they still have tremendous leverage. their margins are still through the roof and they're operating more efficiently. so i think the two sort of offset each other. these headlines should help the rails i think. but i don't think you can buy csx right here. >> did you see the other side of this? 20 to 25% of revenues from was coal. is coal dead? that could be a huge gaping hole for them in their earnings in their revenue base. >> i think the iyt is in trouble. it's down 12%. the s&p is down 7% from the highs. when you think of some of the things that got it there, some of the airlines, it was fed ex. so if we're seeing global growth concerns, we're seeing ebola, you know, kind of curtailing some demand, but also some travel, the iyt, this is not something you want to step in right here. >> and if one worry out there is

a game we all can play, then this would spell bad things for the market. >> it would. although this is very, very, very heavy ebola. these moves we've seen, just looking at the derivative plays. >> airlines. >> airlines, cruises, look at car, avis, absolutely annihilated. this cannot be all -- very heavy ebola. coming up next, netflix placing big bets on the international expansion plans, yet the stock is sliding today ahead of earnings. we'll hear from analysts who just upgraded the stock after the market closed. that's next. plus, big bang on tap. jpmorgan, citigroup and wells fargo set to report tomorrow. stick around. we'll be right back. [ male ah we wish above all...is health. so we quit selling cigarettes in our cvs pharmacies. expanded minuteclinic, for walk-in medical care. and created programs that encourage people to take their medications regularly. introducing cvs health. a new purpose.

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welcome back to "fast money." we are live at the nasdaq markets. a big sell-off into the close today. is this a dip worth buying into earnings? that is coming up. and tesla once seemed like it could do no wrong. now it's down more than 20% from the highs. are tesla's glory days behind it? and jpmorgan, citigroup and wells fargo could shake up the markets even more when they report before the bell tomorrow. well tell you which big banks to watch. that's straight ahead. we start off with netflix

here, striking a deal with showtime to beef up its european launch. the stock fell with the rest of the market today, is now up slightly in the after hours session. analysts just upgraded the stock to a buy and target of $600 a share. just about an hour ago. he joins us here at the nasdaq. rich, great to see you. >> thanks for having me. >> what is behind this call and we should know netflix reports on wednesday. why now? >> i think really what we're seeing across the board, this is the first time the ad market has been weak, tv advertising has been weak while the overall ad market is strong. same time subscribers to multichannel television satellite market is starting to fall. what everyone needs to do is figure out new ways. from nbcuniversal, you go across the board of every media company you could name, they need to figure out new ways to generate money and make profit. the answer is licensing and content. overseas, licensing more and more great content. this is not the dregs and the low quality stuff. great content is feeding into netflix. everybody wants and needs

netfl netflix's money. better and better content is making it more attractive from a subscriber's content and to the point you want to pay more for it and you're willing to pay more given the better content. >> you're spot on the name obviously. i've been bullish, as a lot of us have. how do you get from 440 to, a battle, 32% move. the stock currently trading 70 time forward earnings. >> you have to believe in international, first of all. if you don't believe the international story, that they can get to 100 million subscribers in 2017, anyone watching this program should not own this stock. if you don't believe that there is going to be a rebust success in france, germany, and overseas, don't own the stock here. in terms of how do you actually get there, that's 70 multiple that you just mentioned, that's a very inflated number when you think about the fact that they're investing all of their u.s. profits in overseas growth. if you actually looked ate, and the way we think of valuation is not them losing money overseas there is obviously a significant value to this subscriber base

that they're building overseas. we think by 2017 they could have almost as many overseas as they have domestic. you have to put what do you any in a realistic margin is overseas. we think effectively they can get to a 25% margin. they're never going to show that. let's be clear. if netflix shows international profitability, they probably failed but they haven't found another market to launch in. the strategy is to roll it forward much like amazon thinks about continuing to grow the bigger business, grab the footprint and take share from the established ecosystem. that's what you have really got to believe in versus saying what is the exact multiple on current year profits. >> you pay for the content. if you look at disney, disney up 9%. netflix 19% year to date. is this a battle for my television right now? have they changed the way i'm watching television? is netflix the new disney now? are they taking over everything at this point? and quite frankly about the monthly fees, where can it go

to? >> i think on the first point, there is always going to be exceptions, right? amc is walking dead, you watch live. and they get huge ratings, biggest ever last night for the season premier of season 5, ill. there is always going to be exceptions. but i think for the average show, what you're seeing across the board in television right now is that live ratings are really weak. unexplainably weak for the last six to nine months. and i think consumer behavior is finally hitting that tipping point. you're always looking for what is that change in behavior mean. consumers for the vast majority of content don't need to watch live, whether they're stackling them on their dvr and watch organize watching on comcast or some cable operator's on demand platform, or watching them a year later on netflix. the demand to watch live tv has never been lower. and i think we're just at that inflection point for behavior. and i think that's causing advertisers to look elsewhere. so i think from that standpoint, yes, netflix is competing every night for your time and attention. do you turn on the dial and turn on the traditional television outlet or do you click on

netflix? the more that netflix wins the moments of truth, the more that they're going the drive their overall subscriber base. because more time spent means you're less likely to turn. and you're willing to spend more. your point on what they could price it at? they're not raising the price over the next 12 to 18 months given they are just flowing in a price increase. if you look at $8.99 for the amount of content you're getting. >> right. >> anywhere, any time for a family, think of it as an everywhere baby-sitter and a global everywhere baby-sitter. no. i think it all goes into price value equation. hbo charges you $15 a month. and there is no kids content. you can't take it everywhere. think of the price value relationship. yes, hbo has higher quality in terms of "game of thrones" is certainly better than what you'll find on netflix in terms of their new originals. but when you look at the breadth of content, that argues. >> at 6:00. >> take a breath. >> he is passionate about his upgrade.

just upgraded the thing half an hour ago. rich, thank you. >> commercial-free. >> i think apple has been a big boon for netflix. when you consider the 6, 7, 800 million itunes accounts out there, i think apple pose as big threat at some point, especially if netflix does not continue to have the success with the original content that they've had. apple has all the building blocks to put together the sort of content that netflix does for their streaming network. so to myong you touch this stock until 350, maybe even 300. >> yeah, i actually still think it's a buy right here. i don't think apple is a great competitor. i just feel netflix is easier to get to than apple when all things are concerned. with my kids on an ipad, i feel that they can control it. that and amazon prime, they can increase their price as well. >> it works for you in the grasso household. >> it surely does. i like them both. >> one misstep, otherwise everything right. time for pops and drops.

darden restaurant downs 3% after piper jaffray downgraded to a neutral. karen? >> i think that was a pop in this market. not much going on here. they have finally won. now the work begins. we're long. i think over time they'll do a good job here. >> pop for semantic. up 1%. >> this is bucking the trend. last week they decided to split their storage and their security businesses here. this is a real problem for me. this company is a massive value destroyer. the fact they're going to split up with the new management that has preside over new management the last ten year. ten years they bought back $12 billion of stock since then. their market cap right now the $15 billion. they destroy value. i wouldn't step in on this one. >> a pop for vale. >> it's lockstep with each other. i think you're going see a short-term pop here. but a big global growth is not where it should be. this is a sell-off. >> i drop for yahoo! down 3%

despite being bumped to a buy rating buy of allen gillis. >> $50 price tag. that's where pete thinks it's going. i don't know if it gets that high. but 38 a bunch of times. i'm in the 45 back to camp. >> and a drop for putting the high in high-end handbags. luxury retailer hermes is under fire for selling handbags that customers claim smell like marijuana. the birken bags are being returned because of their smell. it causes the bag to reek of weed when left in the hot car direct sunlight. they're being sent back to hermes headquarters in paris for a full rebuild. >> that's a great job by our folks. see, that's leonard skynard's smell off of street survivors. >> the album with the plane crash or something like that. >> they were engulfed in flames and then they had to go -- yeah. coming up, by the way, october 20th the anniversary of that. >> okay, rainman.

now to tesla. the high flyer continuing to fall out of bed lately. down more than 14% in last week alone. our own phil lebeau is here at the nasdaq with more on tesla's big decline. phil, it seems like elon musk was right when he said the stock may be overvalued. >> you mean the teslaenarians? look at what the stock has done in the last month. you mentioned down 14% in last week. down 19% in the last month. a lot of people are saying wait, the bloom is off the rose. i'm not predicting that this stock is going to crater. it is people stepping and saying what happened here. it's the post d-day slump. last thursday, the hype that was built into this event in los angeles was ridiculous. there were people saying it's the new model. it's the greatest mod until the world. well, no it is advancements for the model s. important advancements, ones that will help the vehicle but not the greatest delivery of new technology ever. also on top of that, the model s

sales haven't changed. finally the momentum has pulled out. the next catalyst for guys will be the q-3 earnings report. that's when we get a sense of okay, what are the sales so far. will there be any change? we don't expect any kind of a change. certainly not for this year. but then when you look at next year, i think that they're keeping their estimates exactly where they are. so the bottom line is this. you look at this stock compared to the other automakers. we talked to sergio marchioen today. >> you asked a great question. you asked him if they were scared of tesla. and he said something to the effect of not scared but impressed. >> scared is not the right term. >> right. >> i think we have the sound bite cued up. essentially i asked him adam jonas wrote a note saying look, they're nervous in the boardrooms for the established automakers. they're looking at tesla saying uh-oh, what are we doing here. i asked sergio are you scared of elon musk and tesla. here is what he had to say.

no. he basically said. >> he didn't say he was scared. >> it's a great accent, though, by the way. in terms of the q-3 earnings, are we expecting these update on the giga factory, on x? >> no. we don't expect it update on giga factory, primarily because they just announced it. they're in the very early stages of just moving some dirt around there. we don't expect any change there. i think when you look at the granularity within their report what is happening in china will get the most attention. and remember, because they have more orders than what they can produce right now, people are going to sit there and say well, that's it there is no more demand in north america. that's not true. they're shifting the sales and the deliveries over to china to keep up with the demand over there. >> i actually think the stock has held in there really well when you consider this is a name that started at 30 something, it's up eight fold, down 20% in this tape really isn't terrible. i think it's pretty good. >> it stopped on a dime at its

200-day moving average. the last time it did that it rallied back 38%. china is what we're looking at. the numbers coming out of china is what we're look at. that is going to be in next luxury market for them. and they have to ratchet up behind the 8 ball for their pollution quotas. >> absolutely. >> is that the only metric that we're keying in on? >> it's not the only metric, but it's the one that people are keying in on the most. china will soon past the number one market for luxury automobiles. and china would love to do something about the pollution over there that's right in the wheel house for tesla. the question is whether or not they can ramp up production. he has already said they're going to have to build a factory over there. >> and the fact that they favor domestic producers, chinese producers over tesla. >> absolutely. but i think the tesla technology right now is so far ahead of what you see in china that they have that advantage. at least for the time being. >> shoe. phil, thank you. phil lebeau, all the way from chicago here on set. very exciting. >> this is the second time? >> ever. in the history of the show. in the history.

>> all right. still ahead, the banks are gearing up for a big week of earnings. we trade one analyst's top picks right after this break. monitor beeping ]g, woman: what do you mean, homeowners insurance doesn't cover floods? [ heart rate increases ] man: a few inches of water caused all this? [ heart rate increases ] woman #2: but i don't even live near the water. what you don't know about flood insurance may shock you -- including the fact that a preferred risk policy starts as low as $129 a year. for an agent, call the number that appears on your screen.

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sniefrl todays a late day in stocks sell-off putting attention on bankers. many more names due out later in the week. let's bring in matt burn now, senior analyst with wells fargo with a preview of what to expect. matt, great to have you with us. >> thanks for having me. >> you favor jpmorgan and citi. it's primarily a valuation call? >> for both names, yes. in terms of citigroup it's tangible book as well as forward consensus earnings. and we believe there is probably two or three catalysts over the six to nine months that we think will get the stock moving. jpmorgan is really a valuation on the pafact will earn common equity over the next 12 months. the rest of the group is only going to earn about 10% to 11%. >> where does that get you as a target for each of those? >> in terms of jpmorgan, we're in the 66 to 68 camp. so about a 15% upside. we've got about 17% upside to

the mid point of our valuation range for citi. >> matt, to be a bank analyst, you have to have a view on bank rates. how do they play into this equation? >> well, you've seen for the past six to eight weeks a lot of investors have been playing the rates going higher trade, largely starting the middle of next year. as of about three weeks, four weeks ago, you had about 45% chance in the futures market telling you rates railroad going up by the middle of next year. as of this morning, it was less than 15%. that gives you a sense as to how investors playing rates going up trade is a negative. we've also noticed since speaking to investors is how they're focused on the earnings per share benefit from rates going up. but not really focusing as much as i think they should perhaps on the fact that rates going up will slow tangible book value growth, even earning per share growth is rising. >> matt, we have to leave it there. thank you so much for your time. matt burnell, wells fargo.

what is your financials trade, dan? >> this is a steck or the that has traded very well. the whole group is above the 200-day moving average. we talk about momentum. these stocks better trade well this week. they better react well to good news and better not fall apart on bad news, because that would be a very bad thing for the entire market in my opinion given the volatility we've seen. but i wouldn't touch bank of america until '15. i wouldn't touch citigroup not 56. >> bank of america up 5% year tr >> well, could be. i like wells fargo. just maybe i'm betting citi,

bank of america and then jpmorgan. >> i apologize. i sounded very threatening. >> that's okay. >> he can take it. still ahead, the s&p closing at its lowest level since may 20th. the worst over? one trader thinks so. we'll break it down. that's next. ♪ introducing synchrony financial. bringing new meaning to the word, partnership. banking. loyalty. analytics. synchrony financial. engage with us. we needed 30 new hires for our call center.

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another down day for the markets, but one trader is using the sell-off as an opportunity to take profits. dan is over at the smart board with today's "options action." >> let's talk about the action and the spy. friday there was a put amount in the spy. today getting out of the gate it was a little differently. here is the thing. overall, spy options traded almost two times average daily volume and puts outnumber calls three to one. one trader looking in the morning to monetize ahead. what does that mean? taking off a hedge, closing some puts that he put on maybe the prior week. the november 185-180. 50,000 by 100,000 was sold to close for $1. that's $5 million in premium. and when you think about what is going on here, we had all this put buying on friday late last week when things kind of get panicky. and when it settles down today maybe they're looking to take off the short-term hedge. i want to go to the chart here.

this is something we've been talking forbe a little bit. this is the two-year chart of the spy. that's momentum average. this is what it looked like coming in today. we're kind of holding here, okay, at 190. and then we broke. that's what happened here. by the end of the day, a lot of traders were scrambling to put those hedges back on. i just want to make one more point. this is implied volatility, the price of options of the spy over the last two years. look at this. we just closed at two-year highs here. so the volatility we have traders running for hedges, and we have them looking to take them off quickly. they're looking to protect their gains in stocks or hold on to gains and stay in the game. >> real quick, where did that one by two go out? >> it was a dollar. it probably, you know, went up a lot. because we had -- i think it was sold to close at 189.64 when the spy was there it closed below that. but for a while during the day, it looked like a good sale as the spy was stabilizing for a bit until the last hour of the day. >> thanks for watching us through, dan. more "options action" friday. check out the website,

optionactions.cnbc.com. coming up next on "mad money," cramer is talking to legendary singer neil young about his next venture in the music industry. tune in to find out what it is. your picks tomorrow when woe we come right back. stay tuned. ♪

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we started the week with a sizable sell-off across the board, the s&p finishing down 1.7%. the nasdaq down 1.5%. in the after hour session, we're seeing a dollar decline against the euro. so what is your first move tomorrow? steve grasso, final trade. >> i am long apple. i would be buying apple. remember, they have an event on thursday, am i'm nervous that it's going to be similar to the tesla event. be care tfl day before. maybe you want to lighten up the day before the event. >> dan? >> i think the destruction in the semiconductor index, it's going to flow through to other areas of the pc and the smartphone chain. i'm long put to microsoft. take profit there's. >> karen? >> i always look for quality to buy in a market like this. google. >> guy? >> new graphics. the music is ominous. >> it fits for today. >> but does that mean i'm happy -- >> we'll have to see. >> neil young on jim's show

coming up? >> a pretty big guest. >> i'm hanging out for that. facebook reports october 28th. it traded well today. i like fb, facebook. >> all right. i'm melissa lee. thanks for watching. don't go anywhere. "mad money" with jim cramer "mad money" with jim cramer starts right now.ç+csó . my mission is simplejfjfñi e you money. field for all÷ there csñ always homework in summer and i promise to helpxd u find it. "mad money"xd starts oknow. hey, i'm e1cramer.r tááuz cramerica. i'm trying to save you money. my job is to educate and explain how days like todayok occur cramer. why did today's rally fail and there wasw3 one, dow fell 223